Iran-Armenia ties look promising

Armenia and Iran are seeking to boost bilateral relations. Both countries clearly hope that closer cooperation can be used as leverage to influence broader political and economic issues in the Caucasus. However, relations are developing slowly, due in large part to the fact that close Armenian-Iranian ties run counter to the interests of other countries in the region.

Armenia and Iran, at first glance, appear to be unlikely partners. Iran is a large autocratic and theocratic Muslim nation, while Armenia is a small, Christian country struggling to implement market-democratic reforms. Nevertheless, Iran's ties with Armenia are stronger than the links that bind Tehran to many of its Islamic neighbors.

In early February, during ceremonies observing the 23rd anniversary of the Iranian revolution, Tehran's ambassador to Yerevan, Mohammad Farhad Koleyni, described Armenia and Iran as the "best" of neighbors. Koleyni added that the Iranian government was eager to ease visa regulations in order to enhance travel between the two countries, the Mediamax news agency reported.

The two countries are paying particular attention to expanding trade. At a tri-partite gathering of Armenian, Greek and Iranian officials, held February 13 in Yerevan, Armenia and Iran announced that they would explore the feasibility of constructing a thermal electric power station in Iran to provide power to Armenia, according to the Arminfo agency. Armenia is reportedly intensifying efforts to attract Iranian investment.

Necessity is driving the two countries together. Iran needs a friendly Armenia to provide an alternate transportation route to Russia and Europe. Armenia, meanwhile, faces continuous trade-route blockades from Azerbaijan and Turkey. Yerevan is thus interested in securing a reliable outlet for trade.

Mutual political interests have the potential to play out unpredictably in geopolitical terms. Armenia's well-organized Diaspora must justify ties to Iran, which US President George W. Bush recently tagged as part of an "axis of evil." Stronger Armenian-Iranian ties may also hamper Russian economic interests.

Armenian-Iranian relations are now developing within the context of building competition between Russia and the United States for regional influence. This geopolitical jockeying will exert considerable influence on Yerevan's relationship with Tehran for the foreseeable future. Likewise, Turkey and Azerbaijan are wary of the Armenian-Iranian partnership. [For background see the Eurasia Insight archive]. Armenia's relations with both countries remains strained. Also, Azerbaijan and Turkey's energy interests also put it at odds with Iran. [For background see the EurasiaNet's economic archive].

Ultimately, Armenian-Iranian relations will be shaped by the success or failure of bilateral projects now under consideration. Armenian President Robert Kocharyan's visit to Iran last December helped create a favorable bilateral atmosphere, paving the way for substantive cooperation. In addition to the thermal power station possibility, Yerevan and Tehran have agreed to speed up construction of the Kajaran tunnel in southern Armenia, which will greatly enhance cargo turnover. Another project envisages linking the optical fiber cable networks of the two countries. When the 40-kilometer gap in northern Iran is filled, Iran will be connected to the Russian optical lines to which Armenia is already linked.

Armenians are more excited about collaboration with Iran's energy sector. Armenia lacks meaningful fuel reserves and plans to close its nuclear power station within 10 years. The thermal power station and other energy links to Iranian production centers would significantly enhance Armenia's economic security.

Among the more intriguing possibilities is the construction of a 140-kilometer gas pipeline that would connect the two countries. A pipeline has long been a topic of bilateral discussion. Realization of the project has been hampered by the high cost of exporting Iranian gas, hampering its ability to compete on world markets. New hopes arose after the Korpedzhe-Kurt-Kyi pipeline began construction in 1997, linking Turkmenistan and Iran. This line should enable Turkmenistan to export its cheap gas though Iran to third countries, of which Armenia could be one. But like the friction between Russia and the United States, Turkmenistan's unpredictable behavior adds a debilitating element of uncertainty to pipeline plans.

Turkmenistan's mercurial leader, Saparmurat Niyazov, is scheduled to visit Armenia this spring, raising hopes that a pipeline deal can be struck. But even if Yerevan, Ashgabat and Tehran can reach an agreement, the challenge of finding funding for the estimated $120-million project will remain formidable.

In addition, such energy endeavors run the risk of stoking the wrath of both Russia and the United States. Russia is currently the only supplier of gas, and for the time being, nuclear fuel, to Armenia. Meanwhile, Washington is not eager to see any country engage in energy cooperation with Iran. The tangled web of competing resource-development projects could easily cause Armenian-Iranian initiatives to bog down.

Providing at least some counter balance to potential US and Russian opposition, the Yerevan-Tehran partnership has received support from the European Union. The EU is an especially keen supporter of power projects that promote the elimination of Soviet-era nuclear plants, including the Matsmore plant in Armenia. In addition, better Armenian-Iranian trade connections could facilitate commerce between the Gulf region and Europe. Among EU members, Greece is the most inclined to cooperate with Armenia and Iran, driven in part by Athens' rivalry with Turkey.

Editor's Note: Haroutiun Khachatrian is a Yerevan-based writer specializing in economic and political affairs.